SABIC Increases Its Stake in Clariant to 31.5%

SABIC (Saudi Basic Industries Corporation) said on Tuesday that it had raised its stake in specialty chemicals maker Clariant.

The state-owned company now owns 31.5% in Clariant, up from 24.99% previously, it said in a filing. The increase in stake holding was just short of the one-third ownership that would trigger a mandatory offer for the remainder. Clariant said it did not expect the Saudi chemical giant to seek a takeover.

SABIC had previously said it had no intention to take over Clariant after a joint venture agreement was shelved by the latter in July of last year.

SABIC said the increase was part of its strategy to achieve a leadership position in the Specialties business.

Completion of the transaction is subject to regulatory approvals, SABIC said.

The company’s decision to increase its stake comes after it took a $400 million (1.5 billion riyals) impairment charge on its investment in Clariant in its third-quarter.

In 2018, SABIC purchased its Clariant stake from an activist investor, seeing the acquisition as a way to expand in cosmetics, catalysts and biofuel higher-margin products.